Hi Quinn, You asked for my take on this acquisition and it is one of VERY CAUTIOUS optimism. I think Ross said it best in his post Message 7343115. I have to agree with him, and then add a little more.:-)
Optimistic Viewpoint
They have added the Prometedora, San Francisco, La Espina, and The Cofradia.
They have drilled some test holes on La Colorada and expanded the property, (although I think a while back they shrunk the original property) readying it for a possible j.v. Cominco was originally interested in a j.v. on this property under the old management…so possibly they will return to the table. I would think a j.v on this property will probably be the first order of business to come up in the near future. They can then take the problem of fulfilling their obligations on the property off their plate, and hope for the j.v. partner to find a good deposit. I've always liked this property. Fantasma remains a big question mark so far. With the number of properties they have added to the fold….it increases our chances of finding a viable deposit. The only question is, what kind of deal will PFG cut? If they hit paydirt and come up with a huge discovery on the new properties, it could be a company maker….on the otherhand……
Pessimistic Viewpoint
Having a lot of properties does not necessarily mean there will be a mine in PFG's future. This is true of any mining company. We have heard about property before that was supposed to be a hot property ie: Leticia, which T.Shrake had coveted for a long time prior to coming to PFG… and that turned out to not to be so. Cerro Blanco which we had thought would be a great property turned out, apparently, not to be so. We have been excited before, when they optioned the Fantasma, and so far haven't seen much action there.
Looking at the money left in the bank and commitments for the next year:
Money in the Bank (AS of JAN.6/99)--$8,008,969 CDN. (AS of JAN.6/99)
or $5,249,029 U.S. (AS of JAN.20/99)
Out of this money they must pay:
$150,000 U.S. Initial Payment
$ 20,000 U.S. upon signing of formal agreement
$130,000 U.S. upon regulatory acceptance, complete Corp.D.D. on SMRL
$300,000 U.S. Total
$500,000 U.S. on exploration within 12 months
$350,000 U.S. staged payments over 12 months after reg. Acceptance
------------
$1,050,000 $U.S. dollars in total payments over the next 12 months
Total Funds U.S. $5,249,029 - 1,050,000 = $U.S. 4,199,029 left to pay all other expenses.
Add to that, geo and drilling costs, plus ongoing overhead costs, which have been pretty hefty, and it's pretty clear that they will have to come back to the well once again for funding, and soon. Should they require the U.S. $25,000,000, which is $CDN $38,200,000…that's a lot of dilution. The other questions is…will they be able to do it if the POG is still in the dumps at that point in time?
Another question out there is the NSR, and just what the terms are. It will have to be a very good property to warrant this kind of money, and the NSR as well.
To sum it all up, if they have a great discovery, then the rest is academic, but if not, then the treasury will be drained, and we will have only the Diablillos, which is still a question mark, and whatever may happen on La Colorada.
Maybe someone else can think of other pluses or minuses.
Sorry I took so long to answer, but David and I have been watching the Impeachment, and now the Trial, and burn a considerable amount of time debating the issues, the man, and the American publics reaction, from a mainly legal and psychological point of view. Fascinating!
Cheers
Shirley
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